The intermittent closures of the Strait of Hormuz, a critical waterway for Persian Gulf oil exports, caused oil prices to spike this spring. In late March, oil hit $118 U.S. dollars a barrel — about a 60% jump from what oil prices were before the start of the Iran War.
Such spikes mean more costly electric bills for Hawaiian Electric customers, which relies mainly on oil to power its grid. In April, the utility told customers to expect up to a 30% increase in their electricity bills in the coming months.
According to HECO’s monthly energy cost filings, Oʻahu residents using 500 kilowatt hours of electricity — enough to power a small home or apartment — paid about $27 more on their energy bills in April compared to March. Electricity prices rose by another $32 for those customers in May. In total, costs did indeed rise by about 30%.
Costs then started to come down, decreasing by about $19 in June and July.
Neighbor islands saw price spikes as well. Bills rose by about $60 for the average Maui resident and $30 for the average Hawaiʻi Island resident between March and June. Costs on those islands have also started to come down as of July.
In recent weeks, oil barrel prices have dropped to pre-war levels following a deal between the U.S. and Iran to reopen the Strait of Hormuz. However, tanker traffic through Hormuz remains limited.
On Tuesday, three ships sailing through Hormuz were attacked. The strikes prompted the Joint Maritime Information Center, which coordinates the movement of commercial and naval vessels, to upgrade Hormuz’s threat level from “substantial” to “severe.”
